Here are two reasons why DNB Markets believe salmon prices will weaken further

News
1037

But a strong balance sheet will lead companies through the storm, says the investment bank.

Seafood stocks have fallen deeply over the past month – like the rest of the Oslo Stock Exchange. Salmon prices are under severe pressure, after falling by a third in just over a month.

In its morning update on Tuesday, DNB Markets pointed to two factors that indicated that demand and thus prices for salmon will weaken during an economic downturn.

One is that long production times mean that it takes time to adapt the supply and the other is that part of the demand comes from the hotel and restaurant sector, writes TDN Direkt.

“Looking at developments during the 2007-2009 financial crisis, however, we saw both salmon prices increase and the volume of EU markets increased by 4-8 per cent during this period. In general in the sector, we also believe that the companies have sufficiently high financial flexibility to navigate through the challenges,” DNB Markets continues.